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Telkom said to split tower and property assets into separate unit

Telkom plans to break out its telecoms towers and property assets into a separate unit that may then be listed on a stock market, according to two people familiar with the matter.

The new entity would be run by a new, property-focused management team charged with generating extra revenue for Africa’s biggest landline provider, said the people, who asked not to be identified because the plans were private. Telkom had one of the largest property portfolios in SA and CEO Sipho Maseko wanted it to contribute more to earnings, they said.

The move extends a turnaround strategy at the former phone monopoly under Maseko, who has cut costs and helped to engineer a near quadrupling of the stock price in his four years at the helm. The workforce has been reduced by about half to 12,000 people and the wireless unit is now profitable. The creation of the property business was part of the next phase of Maseko’s strategy, which would involve an examination of each of the company’s operations, said one of the people.

The shares rose 0.9% to R73.68 on the JSE as of 12:34pm on Monday, valuing the company at R38.8bn. The business is about 39% owned by the government.